Select Page

    Reading time: About 7 minutes

    Digital transformation is when businesses choose to adopt ‘digital’ ways of existing and operating as distinguished from anything else. It could be in the form of computers, laptops, smartphones, printers, scanners, emails, servers, cloud, internet, ERP, digital marketing, analytics, biometric system, auto-replenishment systems, AR/VR, mobile app, website, etc.

    Thus, the scope of digitizing a business or adopting digital transformation is wide and can range from being simple to complex.

    Digital transformation in the retail industry has enabled businesses to revamp their business models, operations, meet the changing customer behaviour and expectations, and stay competitive.

    Digital technologies have played a big role in transforming the retail industry and especially by creating its alternative face – eCommerce. That does not mean digital transformation is only meant to cover the journey from retail to eCommerce. Companies like Ikea, Amazon (Amazon Go), and Zara to name a few have transformed the face of conventional retail with retail digital transformation.

    Let us first see some of the ways in which retail businesses can adopt digital transformation.

    Data Analytics

    Gone are the days when the sole focus of retail owners used to be buying low and selling high to make profits by not considering other factors. But retail businesses are not run the same way now. With retail data analytics, decision-making in almost every aspect of the business has become data-driven.

    When a business goes digital, its systems also begin to generate data from all the corners of the enterprise. This data is gold for business. Data analysis can reveal meaningful insights for improving business strategies and performance across all the departments. From customer behaviour, product performances, region or store performances to managing business operations, meaningful insights from data analytics are highly emphasised.

    For example, Zannier Group consolidates data from multiple ERPs to better understand customer purchasing patterns to influence real-time sales and inventory decisions to stay ahead in the game. Such insights are extremely useful to improve strategies and operations. Many ERP applications already come with inbuilt analytical capabilities with dashboards and metrics to help in decision-making.

    Switch to Cloud

    When we speak of digital transformation in retail, there’s much more than creating a website or posting cool content on social media. Here, we are talking about the backend platform and an important aspect of which is web hosting and infrastructure. This is where the cloud comes to the ground. If your online store is hosted on a local data centre, then its scalability, security, and performance are limited. Instead, on switching to cloud-based infrastructure, retailers can have greater flexibility, vast capacity, improved scope for scalability, and comparatively lower cost of ownership. These benefits could be eventually used to deliver a superior digital shopping experience for customers. There are many reputed cloud service providers in the likes of Amazon Web Services (AWS), Google Cloud, and Microsoft Azure.

    Novel Technologies

    After the dust (read that storm) around the novel coronavirus pandemic begins to settle, it will be time for retail companies to get closer to advanced digital technologies like Artificial Intelligence, Machine Learning, Internet of Things, Augmented Reality, and Big Data Analytics. These technologies have existed for a while now but only a few companies are putting them at work. Let us simplify and see how some of these technologies can help in retail digital transformation.

    Artificial Intelligence: AI is empowering machines to mimic human-like cognitive abilities. And by that definition, there are many areas of business which can be carried out using AI. AI is increasingly becoming a common tool for carrying out or aiding business operations and activities. One such area is customer support. AI-powered chatbots are proving to be an effective alternative for carrying out the initial stages of customer support and closing it up with requests for feedback.

    For instance, Tommy Hilfiger and Burberry have launched chatbots to help their customers navigate through their collection. Likewise, Amazon Go stores have replaced cashiers with automation and AI (helpful to reduce checkout time for customers). Robotic process automation has helped businesses achieve retail transformation.

    Machine Learning: Machine learning (a subset of AI) can be used to make educated anticipation of dynamic customer behaviour and add flexibility and improvisation to business processes operations. What machine learning adds to data analytics is self-improvisation. It is not just about establishing trends or making predictions from existing data but automated learning by machines/software to improve its ability to make better assessments and deliver better insights based on new learning. Ecommerce giants – eBay and Kroger applies AI for price optimization which helps them to adjust prices and promotions based on updated data and information.

    IoT:  Another big thing knocking the doors of retail is IoT. Hyper-personalization is now a reality with IoT. Customers will have lesser worries for product/asset maintenance or replenishment of inputs. Queues in stores would be better managed which is often a complaint generator. With GPS and RFID, companies will be able to track individual items with high precision lending operational transparency with their supply chain partners. According to one study, 77% of retailers attributed IoT as an influencing force on customer experience.

    Augmented Reality (AR) and Virtual Reality (VR): AR & VR technologies are gaining firm grounds in the retail space towards ensuring a superior shopping experience for customers. These cool toys have elevated the in-store experience of customers for many retail brands. For instance, IKEA’s Place app uses AR to help shoppers envisage (virtual preview) the selected furniture if placed at their homes.

    Advantages of Digital Transformation

    Achieving break-even is a concern but digital transformation is a long-term investment and also a continuous activity. It can only start. We have listed some of the key benefits of adopting digital transformation.

    Increased Efficiency

    What can be done digitally or with automation should be done that way.  The reasons are speed, accuracy, and volume leading to increased effectiveness and efficiency. Various retail automation or store automation solutions have proved this point.

    Automation can help businesses become better at being process-driven. With growth in business and expanding customer base, companies need to be more technology-driven and less dependent on manual execution of routine operational tasks and activities. An even bigger reason is that the benefits of having better and efficient internal processes could be passed on to make a business model more profitable and more value-adding to customers.

    Informed Decision-making

    When a business goes digital, its systems also begin to generate data from all the corners of the enterprise. This data is gold for business. Data analytics can reveal meaningful insights for improving business strategies and performance across all the departments. Such insights are extremely useful to improve strategies and operations.

    More Business

    Better and deeper engagement with customers, made possible with data analytics, always carries a positive influence on the brand image of a business entity. Efficient backend systems are critical to meet customer expectations consistently and create customer delight. Reduced checkout times, better personalization, prompt in-store and remote customer support, digital marketing outreach, device notifications, better inventory management, etc. are a few things which digital transformation could bring and keeping a check on these parameters could be highly instrumental in generating more footfalls and more business.

    Case Study – Wal-Mart

    Wal-Mart is harnessing the limitless potential of Big Data as a part of its customer service initiative. They are providing a smooth check out at the stores by using the data analysis on predictive analytics results on demand and billing counters needed. Wal-Mart also uses big data analysis on customer’s buying behaviour enabling them to personalize the shopping experience for its customers.

    Wal-Mart is planning to use an Artificial Intelligence (AI) platform for better engagement and negotiations with its vendors and suppliers as it is not practically viable to negotiate with thousands of vendors about the best business terms which are also mutually beneficial.

    Wal-Mart also leverages Machine Learning to optimize transportation costs and travelling time on delivery routes and to enhance its customer shopping experience.

    For all these innovations they frequently come out with, the company extensively relies on the power of data. Wal-Mart is working on what will be known as the largest private cloud solution to process 2.5 petabytes of data per hour.

    Case Study – IKEA

    IKEA has revolutionized the way customers buy furniture these days by using digital transformation in their operations.

    IKEA Place app allows customers to virtually place IKEA furniture products in their house using Artificial Intelligence (AI) and Augmented Reality (AR). Customers can try out different furniture combinations before finalizing their purchase by using this app. The company has used these technologies as a part of its retail digital transformation efforts.

    IKEA is also leveraging on AI to make optimal use of returned products from customers. IKEA will not discard the returned merchandise completely, rather an AI-based platform will suggest them the most profitable destination where it can be put to use. They can sell it to a third party vendor, or donate it to charity or reinstate back to the stores depending on the company’s priorities.

    IKEA intends to harness the power of the Internet of Things (IoT) via IKEA’s Smart Home project. The Home Smart consists of an expanding range of smart devices like smart speakers, smart lighting systems, etc.

    IKEA has also launched a dedicated R&D hub ‘Space10’ lab which is tasked with coming out with smart products and living solutions for the future.

    IKEA is also planning to integrate its platform with Geomagical Labs, an AI and AR start-up. The start-up has developed a 3D room modelling system using smartphones. This will help customers to realistically imagine their homes with their smartphones from any location.

    There are many such digital transformation efforts IKEA has been making to give shoppers a superior experience and for a better living in the future.

    About Us

    Your Retail Coach (YRC) is a retail consulting and eCommerce outsourcing company in India offering a wide range of services in retail, eCommerce and retail omnichannel catering to a multitude of industries. In supermarket retail consulting, YRC consultants can help in the various stages of store set up of a grocery or supermarket business including store operations manual, digital marketing strategy, layout planning, inventory planning, IT-system integration, launch activities etc.

     

    PROCESS AUTOMATION

    The idea of having Ecommerce Consultants on-board from the beginning itself points towards reducing the involvement of the promoters in daily operations. Ecommerce Businesses willing to be a brand reaping profits & sustaining the competition must ensure that most of their processes should be automated. The more the manual intervention, the more would be the errors.

    In Ecommerce business, you get only 1 chance to impress the customer & if you mess up there, you lose the customer for long.

    Process automation in respect to all the activities pertaining to customers from order receiving to order fulfilment is a must for a seamless experience for the customers.

    Task Management is another grey area where most deadlines fail as 90% of the tasks are assigned manually & are forgotten, unheard, misunderstood or mistaken.

    YRC Team of Ecommerce Management Consultants helps to make maximum of the processes system-driven to ensure minimalistic manual intervention.

    VIDEOGRAPHY & PHOTOGRAPHY

    No matter how good your product is, the customer would know only if it looks good.

    Photography includes the following steps:

    • Cataloguing your products
    • Cataloguing your images
    • Backup your images (A few cloud storage solutions include Dropbox, Google Drive, Bitcasa, Apple’s Cloud Storage etc.)
    • Choose the right camera & lens (You may also outsource the photography to a third party agency)

    DIGITAL MARKETING

    Digital Marketing includes SEO & SMM. SEO i.e. Search Engine Optimization includes activities like back-linking, meta tags, blog-writing etc. to ensure your website ranks on the 1st page on Google Search.

    Next comes SMM i.e. “Social Media Marketing” which as the name suggests including promoting your products on all the social media sites, email marketing, influencer marketing & several other BTL activities.

    These activities are going to be recurring & would decide the traffic on the website, the conversions, whether the right target market is tapped, the likes, the views, the orders, the reviews & much more. YRCs Ecommerce Consultants create a budget for digital marketing right from pre-launch to launch & for each month thereafter.

    Building digital marketing strategies in coordination with the agency, selecting them to signing them off would be the role of YRC.

    This ensures seamless coordination, detailed interactions & desired execution as it is always advisable to work with a single agency than multiple of them.

    IT INTEGRATION

    Selection of the right software for smooth functioning of back-end operations right from production to webstore display would be suggested and integrated by YRC Team.

    YRC’s Team defines SOPs of Product Movement, maps it with the locations & people. They then create a blueprint of all the features required in the software & help in shortlisting & selection.

    IT Integration involves connecting your offline inventories with real-time online webstore so when a sale occurs, inventories get deducted real time across offline as well as online platforms.

    This helps in accurate inventory management, maintaining the MOQs, re-order levels & achieving the optimum inventory levels.

    Some popular software include unicommerce, viniculum for your front-end website management & Genisys for your entire back-end Purchase, Production, Accounting, Invoicing etc. management.

    WAREHOUSE & LOGISTICS PLANNING

    • How many cities or countries you wish to sell in?
    • Where should your Warehouse be located?
    • Should you have one warehouse in each country or city?
    • Should you be having your own delivery team in your base city?
    • Would the 3rd party vendors be reliable? What happens when they lose or misplace your product during delivery?
    • How should I manage the logistics if my goods are coming from different countries?
    • How should the goods be stored and barcoded?
    • How much space do I require for warehouse?
    • I am sure several such questions must be haunting you while you think of starting your own fashion ecommerce brand.

     

    At YRC, our warehousing and logistics experts can help you devise a strategy for all of the above mentioned queries and much more.

    We design the layout of the Warehouse considering the inward, goods processing, software entry, barcoding, outward, goods return, scrap storage, goods stacking & much more.

    Logistics route plan is devised considering the manufacturer to your warehouse and from there to last mile delivery locations.

    UI & UX DESIGNING

    This Step involves 03 distinct parts:

    Part 1: Choosing the right Platform:

    From several platforms available in the market right from Shopify to magento, woocommerce, prestoshop, wordpress etc. you must choose the one that fits best for your business

    Part 2: UX Designing:

    “UX” denotes User Experience, which if put in simple language is building the functional requirements of the website.

    UX Designing includes designing the features required in the website, customer journey map, website features, the browsing features, navigation features, ecommerce order management process flow, checkout cart features, catalogue management, ecommerce payment system, cross selling features & much more.

    “As per statistics, 68% of the customers abandon the carts before payment”

    An interesting UX ensures the customer sticks on to the website for a longer time.

    Part 3: UI Designing:

    UI stands for User Interface, which means designing the look and feel of the website. UI includes using the right colours, elements and the entire aesthetics of the website.

    A good User Interface ensures the user completes the task that he has come for. It navigates the user through the journey of the brand in the simplest but most effective way.

    The UX designer maps out the bare bones of the user journey; the UI designer then fills it in with visual and interactive elements.

    If User experience is the bare bone, user interface wraps it up with an attractive cape.

    At YRC, our team if experts can help you develop the entire User Journey to ensure it is engaging!

    SAMPLING & PRODUCTION

    This step follows the “Designing” Phase, whether you have an in-house design team, freelance designers or an outsourced design company. It is one of the most exciting phases, as here you see your designs turning into products & your ideas turning into reality.

    In most start-up cases, production is outsourced i.e. brands tie-up with the established manufacturers/ job-workers to get their products manufactured.

    Sampling involves multiple 04 Stages, Fit-Sample, Prototype Sample, Pre-Production Sample & the Production Sample.

    Prototype Sample is the first sample provided to the buyer. It can be in any fabric/ colour. This sample is just to understand whether the product design looks equally great in reality.

    Fit Sample, as the name suggests is prepared to check the fit of the garment i.e. the various sizes, length, width etc.

    Pre-production is made by the actual production line. Here the stitching quality and other aspects related to manufacturing are checked. This is the last stage where rejection can be accepted.

    Production Sample is made before the production which is the replica of what is going to be finally produced.

    Once you are through with all this, you are good to go ahead & get your goods manufactured.

    PRODUCT DESIGNING / SOURCING

    Product Designing or Sourcing is the heart of the Ecommerce Fashion Brand.

    Product Designing / Sourcing can be done in several ways, as follows:

    • In-house Design Team
    • Freelance Designers
    • Outsourced Design Team
    • Ready Product Sourcing (From Manufacturer or Wholesaler)

    At YRC, we evaluate your business strategy & business model to arrive at the decision, which of the above ways would be best-fit for your business. In certain cases, product sourcing may be a combination of the above.

    These are the people who are going to build your brand! Whether they are the designers or merchandiser, your brand look is going to be in their hands.

    If you are designing each garment from the scratch, the sourcing would play crucial role in developing design identity of your brand.

    Sourcing includes fabric, trims, lining & all the raw material required to build the garment.

    BRANDING

    Branding is the “Look of the Brand”, right from logo to tagline, the colours used, the brand story, the brand communications on social media, the packaging & all the other aspects which speak directly or indirectly to the customers. Branding constitutes the look & feel of the brand & hence must be thoughtfully planned to match with the product that we are selling.

    Branding must appeal to our target audience. Example : A golden colour logo depicting finesse, art, richness, premium, however beautiful it may be individually cannot go with a brand selling affordable kids wear products. So, your logo must be in-line with your brand positioning, whether you are an expensive brand or a luxury brand or a value for money brand, it must be depicted from your “Branding”.

    It is an integral part to attract the target audience.

    ORGANOGRAMS & SOP’s

    Organogram is the “HR Blueprint” of the business which is created at the onset, to map out the team required across each function at various stages of the business. At the launch, only key people need to be got on board to ensure the project gets started & at this stage, all of them need to multi-task. Similarly, certain financial as well as operational goals are set for addition of the further team. Example, for the operations team, we hire 1 operations manager during the pre-launch phase & we add 1 more only when the business kicks-off & we reach a volume of selling more than 1000 pcs/ month or a turnover of more than 0.1 million USD.

    SOPs are Standard Operating Procedures, a bible to run the entire organization right from Sales, Purchase, HR, Order receiving to Order fulfilment, Inventory Management, Accounts, Warehouse, Logistics, Supply Chain, Production & all the other relevant functions for the business. Business must be organized from its first day of operations; only then the tasks can be delegated.

    At YRC, we design the organization structure, the processes, and approximate time taken to execute each process, job profile of every member within the organization, their KRAs, KPIs & the Reporting Structure.

    CRITICAL PATHWAY

    Critical Pathway Analysis (CPA), is a project management technique which cannot be overlooked while launching an ecommerce fashion brand. Brand launch process is cumbersome with multiple inter-dependent & time-bound tasks involved, which need to be tracked to ensure the project remains on track.

    CPA outlines key tasks across the project, their turnaround time (TAT) & the dependencies of tasks upon each other. It identifies the sequence of tasks, their interdependent steps from inception to completion, their criticalities, and their dates of onset, target dates of completion along with the key responsible person for the respective activities. Critical Pathway helps in understanding the unimportant & not urgent tasks which may jeopardize the execution of the project because of an unexpected snag! It also maps out the potential bottlenecks which might be posed because of the dependencies of tasks upon each other & cases where the next task cannot be commenced before the completion of the previous one.

    CPA detects the minimum & the maximum time involvement of a particular individual or team to execute the task, thereby arriving at the overall deadlines associated with the project.

    At Your Retail Coach, we design the Critical Pathway & review it periodically to ensure the project is on track & the progress is measurable.

    BUSINESS STRATEGY & BUSINESS PLAN

    Business Strategy includes the vision, mission, goals, business model, business plan & strategy for all the functions within the organization.

    Business Strategy is a well-defined plan that outlines who, what, where, why, how & when for the company; for example, who would be the target market, how to attract the target audience, when to launch new products, where to operate from, how to handle competitors, what would be the USP, what would be long term goal of the organization & several other answers to the 5Ws of Strategy.

    Business Strategy aligns the organization towards a common goal. Business SWOT helps company to identify & overcome their weaknesses & focus to sharpen the strengths. Business strategy forecasts future risks and helps business in building skillsets to overcome the potential threats.

    YRC’s Business Plan focuses on creating a “Blueprint” of the business, thereby deriving the feasibility of the concept & gauge whether the opportunity is lucrative to invest time, energy & effort. Business Plan creates cash flow understanding i.e. building inflow & outflow cash projections from Week zero to week 60 i.e. 05 year projection. Business Plan calculates the capital investment, operating costs, one-time costs, recurring costs & all the other numbers relevant to obtain the breakeven sales, return on investment, return on capital, internal rate of return & several other ratios. Business Plan is also one of the important requirements if you are targeting the “Investor Route”. Fund raising becomes extremely transparent & channelized. With business plan panned out clearly, the business will know until what point must it be stretched & where to stop, which reduces the probability of unplanned investments.

    MARKET RESEARCH

    Starting the concept of Ecommerce Fashion brand with Market Research ensures we get detailed understanding of the industry & this research report also acts as a social confirmation for your concept. Market Research helps in understanding the target locations, their population, potential online buyers for your product, competitors for each category, and top selling products of the competitors, competitors’ price range, offers & their responses & much more. Market Research helps in thorough understanding of your brand position as compared to our competitors. It helps in identifying gaps in the market, in your category along with the scope of the said product in the desired market. This will help in validation of your concept & prevents you from making the same mistakes as your fellow brands, eventually saving your time, energy & efforts. This phase is also a make or a break phase, as the market research study may at-times come up with some eye-popping numbers & statistics which might compel you to re-think on your product or category that you are planning to sell or alter your entire concept itself!! Market Research Reports analyse the competitors’ webstore for their traffic, conversion & sales. This is extremely valuable information to derive our inventory budgets & projections, which takes us to our next phase.